BPI to focus on lending despite falling interest rates
MANILA, Philippines - The Bank of the Philippine Islands (BPI) will still focus on its lending business next year even as interest rates continue to decline.
"We've always been naman back to basics [and this] is our lending growth. So we'll stay in that area, and maybe some cost efficiency and then we'll see where it goes," BPI President and Chief Executive Officer Aurelio "Gigi" Montinola III said on Tuesday.
Montinola was commenting on whether the bank is thinking of shifting its focus on trading, as gains from this helped buoy the 34% year-on-year growth of the firm's non-interest income as of September.
"The reality is that trading income for many people may have become effective in the last few years. The banks, too, have made a lot of money from trading as the country improved," Montinola noted.
Montinola stressed that the bank, along with others, will just have to "deal with the reality" of falling interest rates.
"As the Philippines improve, there's always that possibility that interest rates will also drop which basically what has happened," Montinola said.
Average bank lending rates stood at 5.50% as of July, below the average of 6.63% in 2011 and 7.67% in 2010, data from the Bangko Sentral ng Pilipinas showed.
The rates are seen to further decline as the central bank last month implemented its fourth policy rate cut, bringing overnight borrowing and lending rates to 3.5% and 5.5%, respectively.